A lot of homeowners we talk to have heard there’s money available for heat pump upgrades but have no idea how to actually get it. That’s fair, because the rebate landscape in North Carolina changed pretty significantly at the end of 2025. The federal tax credits that used to sweeten heat pump deals expired on December 31, 2025. But the state programs that replaced them as the main financial incentive are now bigger and more widely available than ever. If you’re thinking about installing a heat pump in 2026, here’s what you actually need to know about North Carolina heat pump rebates and how to claim them.
The Federal Tax Credit Is Gone, But State Rebates Are Still Very Much Alive.
The Section 25C Energy Efficient Home Improvement Credit, which had been covering up to $2,000 per year for qualifying heat pump installations specifically, was terminated effective December 31, 2025 under the One Big Beautiful Bill Act. Equipment needs to have been installed before that date to qualify, and there’s no federal HVAC tax credit for anything installed in 2026. Same goes for the 25D Residential Clean Energy Credit, which had covered geothermal heat pumps at 30 percent of project cost.
That’s the bad news. The good news is that North Carolina’s own rebate program, Energy Saver NC, launched in January 2025, expanded to all 100 counties in February 2026, and has more than $200 million in funding available. For income-eligible households, the rebates through this program are larger than the federal credits ever were anyway.
Energy Saver NC: The Two Programs You Need to Know
Energy Saver NC is administered by the NC Department of Environmental Quality’s State Energy Office and runs two separate rebate tracks. Which one you go through depends on what you’re upgrading and your income.
The first is HEAR, which stands for Home Electrification and Appliance Rebates. This is the track most people will use for a straightforward heat pump installation. It offers up to $8,000 for an ENERGY STAR-certified electric heat pump, with a household cap of $14,000 across all eligible appliances combined. The rebate is applied as a point-of-sale discount, so you’re paying less upfront rather than waiting for a check. Households earning less than 80 percent of Area Median Income qualify for the full rebate amount, covering 100 percent of eligible costs up to the cap. Households earning between 80 and 150 percent of AMI receive a partial rebate covering 50 percent of project costs up to the same maximum. If your income is above 150 percent AMI, HEAR doesn’t apply to you. AMI limits are set by HUD and update annually, so check your eligibility directly at energysavernc.org rather than relying on any dollar figure you see cited online.
One important caveat worth knowing before you get too far into planning: the HEAR program only covers upgrading from a non-heat-pump system to a heat pump. If you already have a heat pump and need to replace it, HEAR does not apply. That’s actually a pretty common situation, especially for systems installed in the late 2000s and early 2010s that are starting to reach the end of their lifespan. In that case, the HOMES program is still potentially available if your project qualifies on whole-home energy savings, and Duke Energy’s Smart Saver rebate does cover heat-pump-to-heat-pump replacements, so there’s still money on the table worth pursuing.
The second track is HOMES, which stands for Homeowners Managing Efficiency Savings. This one is for whole-home efficiency projects rather than a single appliance swap. It offers up to $16,000 for eligible whole-home upgrades and requires at least 20 percent projected energy savings to qualify. It generally starts with a home energy assessment, so it’s a more involved process than HEAR. If you’re just replacing a heat pump, HEAR is probably your path. If you’re doing a bigger project that includes insulation, air sealing, and a new HVAC system together, HOMES is worth looking into.
Duke Energy Rebates Stack on Top
If you’re a Duke Energy Progress or Duke Energy Carolinas customer, which covers most of the Raleigh-Garner area, there’s an additional rebate through their Smart Saver program that stacks with Energy Saver NC. To qualify, your heat pump needs to meet ENERGY STAR standards (as of this writing that means a SEER2 rating of 15.2 or higher and an HSPF2 of 7.5 or higher, though efficiency requirements can shift alongside rebate amounts), and you need to complete a Home Energy Check within 24 months of installation. Verify the current specs directly at duke-energy.com or with your contractor before purchasing equipment.
The exact Duke Energy rebate amounts have shifted over the past year and sources vary slightly, so we’d recommend verifying the current figure directly at duke-energy.com or asking your contractor to confirm before you plan around a specific number. The programs do stack, though, and combining them meaningfully reduces your out-of-pocket cost regardless of the exact current amount.
How to Actually Apply
The process for Energy Saver NC is pretty straightforward. You start at energysavernc.org by checking your income eligibility. Once that’s confirmed, you find a registered contractor through the program’s contractor directory and get quotes. The rebate gets applied at the point of sale, meaning the contractor handles the paperwork and you pay the reduced amount upfront rather than submitting anything separately after the fact.
A few things to keep in mind. The contractor has to be registered with Energy Saver NC for the rebate to apply. You can’t use just any HVAC company and submit for reimbursement later on your own. Self-installation projects don’t qualify either. And because the program is funded with a finite pool of money on a first-come, first-served basis, waiting doesn’t help you.
For Duke Energy rebates, applications go through their Smart Saver portal at duke-energy.com. Documentation requirements include proof of equipment installation and efficiency specs, and applications generally need to be submitted within 90 days of the installation date.
What This Looks Like in Practice
For a Wake County household earning under 80 percent AMI, the math is pretty striking. Heat pump installation in the Triangle typically runs somewhere between $5,000 and $10,000 depending on home size, system type, and whether any ductwork needs attention. The $8,000 HEAR rebate can cover the full cost for lower-end installations, and stacked with the Duke Energy Smart Saver program, qualifying households may pay little to nothing out of pocket.
For households in the 80 to 150 percent AMI range, the rebate covers 50 percent of project costs up to the cap, which still represents meaningful savings on a system that will lower your monthly bills for the next 15 to 20 years. And for households above 150 percent AMI who don’t qualify for HEAR, the Duke Energy utility rebate is still on the table.
One More Thing: Geothermal
If you’ve been considering a geothermal system, the 25D federal credit that covered 30 percent of geothermal installation costs with no cap also expired at the end of 2025. Geothermal may still qualify for HOMES rebates depending on project scope and the energy savings achieved. Bowman has installed close to 650 geothermal systems in the Triangle since 1987, so if you want to talk through what still makes financial sense given the current incentive picture, we’re happy to have that conversation. You can read more about our geothermal services if you want some background first.
Ready to Move Forward?
If you’re in the Raleigh, Garner, or surrounding Triangle area and want to figure out whether you qualify for North Carolina heat pump rebates and what the right system looks like for your home, give Bowman Heating, Cooling, & Plumbing a call. We’ve been doing this work here for more than 30 years and we can help you understand your options without the runaround. Get in touch here to set something up, or check out our heating services page for more on heat pump installation and replacement.
Frequently Asked Questions
Is there still a federal tax credit for heat pumps in 2026?
No. The Section 25C Energy Efficient Home Improvement Credit expired on December 31, 2025, and there is currently no federal tax credit for heat pumps installed in 2026. The North Carolina state rebate programs through Energy Saver NC are now the primary incentive available.
Who qualifies for the Energy Saver NC heat pump rebate?
Eligibility is income-based. Households earning below 80 percent of the Area Median Income for their county qualify for the full rebate amount; households earning between 80 and 150 percent AMI qualify for a partial rebate; households above 150 percent AMI are not eligible for HEAR but may still qualify for Duke Energy utility rebates. Both homeowners and renters may qualify, though renters need landlord approval.
Do I need to use a specific contractor to get the rebate?
Yes. Energy Saver NC rebates require installation by a registered contractor in the program’s network. The rebate is applied at the point of sale through the contractor, not as a reimbursement you claim later on your own. If you’re planning on using a rebate, confirm your contractor is registered before scheduling the work.
Can I combine Energy Saver NC rebates with my Duke Energy rebate?
Yes, the two programs use separate funding sources and can be stacked, as long as the combined rebate total doesn’t exceed the purchase price of the equipment. Confirm current Duke Energy rebate amounts and eligibility requirements directly through duke-energy.com before planning around a specific number, since those figures have been updated recently.
